Global Sources is a major player in the Asia marketplace. This year its spring trade shows in Hong Kong alone filled 6,800 stands with exhibitors from 11 countries and regions, while total attendance exceeded 61,200 and included buyers from more than 167 countries and territories.
Revenue for the first quarter of the year came in at US$38.9m, up from $37.5m year-on-year, and major gains are being made online, with online revenue at $30.9m (2011: $27.2m) and print revenue at $4.3m (2011: $4.7m).
And now it’s looking to emulate that success in new territories, acquiring shows both in its established markets and unproven waters.
EW caught up with executive chairman Merle Hinrichs and asked what other sectors we can expect to see Global Sources get involved with.
How did you get into the trade show business?
I studied international business and found myself working in Japan, and I’ve worked in most of the countries in Asia before ending up in Hong Kong.
Is Hong Kong under threat from other major hubs being developed elsewhere in the ASEAN region?
No. Seeking an ‘Asian hub’ is not the right way to look at things. There will always be a variety of hubs. For example, Hong Kong is a transit hub; a service industry hub; a financial hub and a shipping hub. Singapore is also a shipping hub. There will always be a need for more than one.
I think areas have different value propositions, and these are always improving. Kuala Lumpur for example is improving its credentials as a travel hub.
There are many hubs in Europe, with London, Paris and Frankfurt, while in the US you have Chicago, New York and Atlanta. Hong Kong will continue to be a major international business hub, as will Bangkok.
How would you sum up Global Sources’ international business strategy?
We operate in more than 200 different jurisdictions and we’re helping our suppliers find new buyers in these markets. We’re already in 240 supplier markets. It is important that private operators are supported with assistance from the transport sectors, as well as the government’s own efforts through the Trade Development Council (TDC).
We are, after all, providing for and supporting entrepreneurs, and working to keep them in
Hong Kong.
Can you give us examples?
In the last few years we’ve continued to extend our shows into areas outside of Hong Kong including Delhi, Dubai, Johannesburg, Miami, Sao Paolo and Mumbai.
Closer to home we’ve not only extended our shows here in Hong Kong, but we’ve also increased the number of shows we operate in China. And we will continue to do so.
At present we don’t see India picking up and it’s not a market that we’re focused on. We have shows in India, our suppliers want to present in India, but we don’t have an India-specific show. We do have a lot of Indian pavilions.
What is Global Sources’ unique selling point?
I don’t approach it that way at all. As far as I’m concerned a trade show is a distribution channel. Just as online is a distribution channel for information and news, Global Sources provides services to the global retail market.
We work with buyers, we work with the top 100 retail outlets in the world, we have a huge number of buyers that buy merchandise from China or the Far East, and my objective is to try and make them as efficient as I can. My business is supplying them with good information, contacts and events.
My USP here is not specifically about the trade shows but how effectively I can assist retailers, wholesalers and manufacturers with their procurement from Asia.
Do you go to them or do they come to you?
Both. We want to know what’s happening in the outlet markets and as you know, these last few years the European and American markets have been weak. The developing markets, often defined as BRICs, have improved their economies and increased their consumption, and this is reflected in our efforts with helping suppliers to find new buyers in these markets.
Currently we are producing publications, websites, trade shows and conferences in 240 countries and territories where the buyers are coming from. There are very few jurisdictions we don’t have representation in.
The world has become increasingly dependent on consumer products manufactured in Asia, with more and more from China. This is our focus. We don’t say to the world ‘Well we’re only going to provide you with information online, we’re not going to do anything else’. Nor do we say we’re only going to produce trade shows or magazines. We use everything that will work to improve the delivery and the value to our customers.
Where is the demand coming from?
There are lots of verticals in China and we have appropriate shows in many of these. But I think you can expect quite a broadening of categories, and I think you will see a continuation of growth in China, both online and in terms of trade shows and other media.
What role did the development of Asia World Expo play in Global Sources’ fortunes?
The primary reason for extending our show business opportunity – our ‘showbiz’ unit – was with the building and contract unit at Asia World Expo (AWE) in Hong Kong.
This was a government project, a beautiful facility that made space available that was not controlled by the Trade Development Council (TDC). This underlines very clearly that when government gets into the management of trade venues, typically and with few exceptions, it distorts the trade show business to a point that either impedes or imposes substantial limitations on the private sector as to what they may or may not be able to do. And that has certainly been the case here in Hong Kong.
We would have entered the business 20 years ago if the TDC had not dominated the venue, and that would have given us opportunities to enter the trade show arena.
This was also true in Taiwan with the trade centre venue in Taipei. A lesser instance but still very much the same circumstances. Now if we are in the export business, of course in an unrelated business to the TDC, we would have entered.
Given that our business is very much about promoting products and trade, which government agencies do as well, we were limited in our availability to do so. But when we put in our offer for tender, we were successful.
Online revenue has risen to almost 60 per cent, how are you achieving those figures?
Online is an excellent medium to accompany live events – we will continue to support our shows with online material. Trade shows are distribution channels at the end of the day.
Our revenue streams are to support buyer-side development.
How do you cope as a private company operating in the same market as public sector organisers?
For agencies that are government-related, the message here is governments should certainly support our industry by making space available and the necessary bonding to build facilities.Because this industry assists in promoting hotels, restaurant businesses, airlines and services of all sorts, they should not attempt to go in and compete with private trade show organisers.
The TDC still considers itself a competitor and will not cooperate, as ridiculous as that may sound. You’d think that given we are promoting Hong Kong, promoting its industries, restaurants and hotels, and convincing people to come to Hong Kong, that they would give us their full support. But they don’t.
What would you be doing if you were not in this industry?
I would be trying to get back into it. We are making a substantial contribution to the industry and at the end of the day the more developed we get, the more we bring people and countries close to each other.
All of this of course bodes well as we move towards more peace and less war.
Photography courtesy of Gafencu Men. This was first published in Issue 3/2012 of EW. Any comments? Email exhibitionworld@mashmedia.net
